VW Hires Former Top Chrysler Exec

Volkswagen has appointed Dr. Wolfgang Bernhard, 44, to be a full member of the Board of Management, the company said in a news release. The statement went on to say that Bernhard will take up the post of Chairman of the Volkswagen brand no later than January 1, 2006.

Bernhard, who was chief operating officer at Chrysler, is a cost-cutter who was credited in part with helping return DaimlerChrysler's Chrysler Group to profitability. He left Chrysler when he didn't get the job of heading the company's prestigious Mercedes division. He reportedly ran afoul of CEO Juergen Schrempp for suggesting that DaimlerChrysler stop pumping money into Mitsubishi, the Associated Press reported, something which later did happen under pressure from the company's directors.

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Incentives Rose to All-Time Highs in September

The average manufacturer incentives per vehicle sold in the United States was $3,146 in September 2004, up $425 or 15.6% from August 2004, and up $524 or 20.0% from September 2003, Edmunds.com said in a news release.

This is the highest industry average since Edmunds began tracking manufacturer incentives in its True Cost of Incentives (TCI) monthly report in January 2002, and Edmunds says its experts believe incentives have never been higher.

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Overall, combined incentives spending for domestic Chrysler, Ford and General Motors nameplates was $4,279 per vehicle sold in September 2004, up $428 from August 2004 and up $661 from September 2003. Chrysler increased incentives spending from $384 to $3,778 per vehicle while losing 0.7% market share since August 2004. Ford increased its incentives by $74 per vehicle, setting a new Ford record TCI of $4,048, and gained 0.8% market share. GM increased overall incentives by $612, setting a new GM record TCI of $4,593 per vehicle and gained 3.4% market share.

In September 2004, European automakers spent $2,497 per vehicle sold, $744 higher than September 2003 but $324 less than August 2004, and lost 1.2% market share. Japanese automakers spent $911, $54 less than September 2003 but $49 more than August 2004, and lost 0.6% market share. Korean automakers spent $2,207, $823 more than September 2003 and $325 more than August 2004, and gained 0.1% market share.

Of all brands, Mini spent the least on incentives in September, $13 per vehicle sold, while Scion spent only $89 and Acura spent just $251. At the other end of the spectrum, Cadillac spent the most on incentives, $6,281 per vehicle sold, followed by Lincoln at $5,566 and Mercury at $5,434.

Last month, Chevrolet gained the most market share, growing from 17.0% in August 2004 to 19.7%, while GMC rose from 3.5% to 4.3% and Ford climbed from 15.4% to 16.1%. Pontiac and Lincoln also experienced noteworthy gains. During the same period, the Honda brand lost the most market share, dropping from 7.7% to 6.5%, while Toyota fell from 10.0% to 9.2% and Lexus slipped from 1.8% to 1.4%.

Among vehicle segments, large SUVs offered the highest average incentives for the sixth straight month, $5,196 per vehicle, a new market segment TCI record. Other segments with high incentives were large trucks at $4,053 and large cars at $3,838. Compact cars had the lowest average incentives at $1,783, followed by compact SUVs at $2,018 and luxury sport cars at $2,084. Large trucks gained the most market share, up from 15.6% in August 2004 to 17.8% in September 2004, while large SUVs went from 5.6% to 6.7%. By contrast, compact cars fell from 14.9% to 13.6% and midsize cars dropped from 15.9% to 14.8%.

Edmunds says its True Cost of Incentives monthly report measures automobile manufacturers' cost of incentives on vehicles sold in the United States. These costs are reported on a per-vehicle basis for the industry as a whole, for each manufacturer, for each make sold by each manufacturer and for each model of each make. TCI covers all aspects of manufacturers' various incentives programs (except volume and similar bonus programs), including dealer cash, manufacturer rebates and consumer savings from subvented APR and lease programs (including subvented lease residual values used in manufacturer leasing programs). Data for the industry, the manufacturers and the makes are derived using weighted averages and are based on actual monthly sales and financing activity.

Volkswagen Delays Mid-Luxury Sedan

has put off manufacture of a model in the next five years that would have slotted in between the mid-class t and the luxury Phaeton, the Dow Jones Newswires reported.

The car, known as the C1, won't be built in this decade as originally planned, a Volkswagen spokesman said. The Phaeton luxury sedan, which starts at $78,263, is priced well above the Passat and it has struggled since its launch, the story said.

VW is going through a period of sluggish sales, falling profits and negotiations with its unions to force a two-year wage freeze. Klaus Volkert, head of Volkswagen's works council and deputy chairman of the company's supervisory board, welcomed the decision to delay the C1. "We have to have other priorities at the moment. In two years, we'll know more," he said.